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Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers.
Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $140 Direct labor 100 Manufacturing support 105 Marketing costs 55 Fixed costs: Manufacturing support 175 Marketing costs 65 Total costs 640 Markup (50%) 320 Targeted selling price $960 For Crandle Manufacturers Inc., what is the minimum acceptable price of this special order? A. $480 B. $320 C. $640 D. $400
Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:
Variable costs:
Direct materials $140
Direct labor 100
Manufacturing support 105
Marketing costs 55
Fixed costs:
Manufacturing support 175
Marketing costs 65
Total costs 640
Markup (50%) 320
Targeted selling price $960
For Crandle Manufacturers Inc., what is the minimum acceptable price of this special order?
A.
$480
B.
$320
C.
$640
D.
$400
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